- The Washington Times - Thursday, March 10, 2016

Affordable housing is slipping out of reach for many D.C. residents, with rents rising by almost 30 percent over the past 10 years as analysts warn that affordable housing is at a crisis level across the country.

Of the 11 largest U.S. metropolitan areas, the District of Columbia was the least affordable to the typical renter household in 2014, according to a report released Wednesday by New York University’s Furman Center for Real Estate and Urban Policy.

From 2006 to 2014, median rent in the District climbed by about 27 percent, the study says, ahead of perennially unaffordable cities such as New York, San Francisco and Boston. That means less affordable housing not only for low-income residents but also for the average-income renter in the District.

“Such a scarcity of affordable units prevents households from moving to units that might suit them better, forcing them to remain in units that are too small, too big, too far from work or too expensive for their current situation,” said Ingrid Gould Ellen, director of the Furman Center and one of the report’s authors.

Nearly a quarter of all D.C. renters earning salaries higher than those of low-income workers but lower than those of the highest-paid earners — effectively the average salaries — are using more than 50 percent of their household income for rent. For housing to be considered affordable, renters should be spending less than 30 percent of their household income on rent, according to housing and economic professionals.

“The housing affordability problem has reached a crisis point — the only real nuance being that it is worse in some parts of the country than others,” said Stockton Williams, who runs the nonprofit Urban Land Institute’s Terwilliger Center for Housing.

The affordability problem hasn’t gone unrecognized in the District: Mayor Muriel Bowser campaigned on a platform to make affordable housing for all residents a priority.

“We know we need to increase affordable housing along the income continuum,” said Polly Donaldson, director of D.C. Housing and Community Development. “And we have an amazing toolkit here in the District.”

One solution for low-income and middle-income residents has come in the Housing Production Trust Fund that Ms. Bowser created last year, Ms. Donaldson said.

The fund provides loans and grants to nonprofit and for-profit developers willing to build or preserve affordable housing in the District. About 40 percent of the trust fund is set aside for the lowest earners in the city while another 40 percent goes for the development of affordable housing for residents earning between $35,000 to $60,000 per year. The final 20 percent goes to housing for residents with incomes under $90,000 per year.

Recently, Ms. Bowser pledged to keep the fund at least $100 million per year throughout her time in office.

‘Up the income level’

Mr. Williams said the District’s housing fund is a good start to solving the affordable housing shortage in the city, but he added that it’s not the final solution.

“Mayor Bowser’s commitment of $100 million to the trust fund is substantial and commendable,” Mr. Williams said. “It will certainly make a difference but no means solve the problem. It should be seen as a down payment on what needs to be a much larger and long-term commitment by the city and the business community working together.”

Money to fill the $100 million-a-year fund comes from several sources, including 15 percent of the city’s deed and recordation tax. That tax is levied when a property deed is registered with the city that amounts to 1.1 percent to 1.45 percent of a property’s value.

Although the District takes the brunt of the criticism in the study, the national outlook isn’t much better.

“This study shows that affordable housing is becoming increasingly out of reach for many low- and even moderate-income renters in the nation’s largest metro areas,” said Ms. Gould Ellen.

On average, rents rose faster than incomes, the report noted.

In nine of the 11 largest cities studied, a renter with what is considered an average income could afford less than 40 percent of the units on the market in 2014. In San Francisco, Miami, New York and Los Angeles, the typical renter could afford less than 32 percent of recent units.

“Housing affordability is a worse problem for more people in this country than ever,” Mr. Williams said. “The lowest-income households have by far the most acute housing challenges. But housing cost burdens are actually growing fastest for households earning between $30,000 and $50,000.”

Nearly 10 million low- and moderate-income working households are paying more than half their income for housing, he said.

The statistics aren’t a surprise to Jeff Buckley, housing policy adviser to San Francisco Mayor Ed Lee. He said affordable housing these days is an issue for middle-income renters as much as it is for the city’s poorer residents.

“The affordability crisis is going further and further up the income level,” Mr. Buckley said.

National solutions

As the home of the U.S. technology boom, San Francisco has long been known for its high cost of living, especially in its rental market. In 2014, an average renter could afford just 31 percent of recently available rental units, an 8 percent decline from 2006. That was the steepest decline in affordability among any of the 11 largest metro areas, according to the NYU report.

From 2006 to 2014, the median rent increased every year in San Francisco. From 2013 to 2014, the median rent increased by 4.5 percent, more than in any other city in the study’s sample.

San Francisco has been dealing with the problem longer than most other U.S. cities, Mr. Buckley said.

“We were the canary in the coal mine for a while,” he said.

As job creation rose with the tech boom, competition for rental units in the city increased because San Francisco is bounded on three sides by water and can’t build out more. With more high earners and a shortage of apartments, rents skyrocketed, Mr. Buckley said.

The problem got even worse, he said, when the state government took away about $50 million a year in affordable housing subsidies. But like the District, San Francisco has created its Housing Trust Fund to help bring back some of the money it’s missing.

To fill the fund, which Mr. Buckley said should collect about $1.5 billion over the next 30 years, the city is turning to its general fund but isn’t taking money from any existing programs. The city wasn’t able to make back all that it had lost when the state pulled its funding but should be able to in the next few years, he said. That money will be used as an incentive for developers to build affordable housing units.

Another solution is to rezone certain areas of San Francisco to allow more density and make sure those redeveloping are including affordable housing, Mr. Buckley said.

“Redevelopment is the engine of affordable housing,” he said. “You have to be aware of the value you’re giving an area.”

The city also created a middle-income renter program to subsidize units and a teacher housing initiative that helps educators in San Francisco reside in the city limits.

“We’ve never had to do that before,” Mr. Buckley said.

The affordable housing crisis eventually will start affecting other aspects of renters’ lives across the country, including in the District.

“There’s a lot of evidence that families who are facing housing hardships may encounter a host of adverse outcomes with their health, at work and in school,” Mr. Williams said. “Affordable housing shortages for lower- and middle-income workers undermine local economic development and competitiveness.”

Despite the potential fixes, the problem is not going away soon.

“Demographic and housing market trends suggest that the problem may get worse in the years ahead, which is one reason why it’s so important to act with greater urgency now,” Mr. Williams said.

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